Chinese real estate agency E-House sees growth as high-speed rail line links Hong Kong with mainland
The company also expects more property sales as Hongkongers get improved residency rights in mainland China under new permit scheme
E-House (China) Enterprise Holdings, one of the country’s biggest real estate services firms, sees more opportunities for growth as a high-speed railway link between Hong Kong and China starts service and as more people from Hong Kong seek to live in the mainland.
The company reported a more than doubling in profit for the first six months of the year, helped by an expansion of its property agency E-House Fangyou, which saw a more than fivefold increase year on year in total sales of new houses for developers, and which currently has more than 10,000 outlets in 54 cities.
The new high-speed rail line will link Hong Kong to 44 destinations in mainland China and is set to start service on September 23. It will give fast access to the “Greater Bay Area”, a network of 11 cities in the country’s south that the Chinese government plans to turn into a connected economic and innovation hub.
“I believe that once the high-speed rail link launches, opportunities for development of the property and services sectors in the Greater Bay Area and the mainland will arise,” said Huang Canhao, vice-chairman of E-House, at the interim results presentation on Monday.
He added that new mainland China residence permits for Hong Kong, Macau and Taiwan residents that grant access to a wide range of social and public services would make it easier for Hongkongers to buy property on the mainland. Applications for the cards started from September 1.
China’s property market has faced increasing curbs in recent months as the government attempts to cool rapid price growth that has been fuelling fears of overheating. Measures have included outright caps on prices as well as restrictions on mortgage lending and on who is eligible to buy.
However E-house said that the market would stabilise.
“While there have been changes in local real estate policies in the short term, there have been no large price fluctuations in property,” said Ding Zuyu, the company’s CEO.
A total of 26 Chinese property developers have stakes in E-House, including the top three by sales – Country Garden, China Vanke, and China Evergrande Group.
The company reported revenues of 2.78 billion yuan (US$407.4 million) for the first six months, up 44.4 per cent year on year. Profit attributable to the owners of the company grew 256 per cent year on year to 467.5 million yuan. Earnings per share rose 93.2 per cent to 0.508 yuan.
The results were the first since its initial public offering in Hong Kong in July.
Cornerstone investors of E-House include subsidiaries of e-commerce giant Alibaba Group, Chinese state-owned developer Overseas Chinese Town (Asia), and Singapore-based property and hotel conglomerate City Developments.
Alibaba is the parent company of the South China Morning Post.